The Foundation Stone of the EU Monetary Union

It marked the birth of the euro, when a new era in the history of European cooperation began 20 years ago with a brief ceremony in Maastricht, the Netherlands. On February 7, 1992 the ministers for the finance and foreign affairs of the then twelve member states of the European Community signed the Treaty on European Union, thus sealing the introduction of a single European currency. At that time it was signed on behalf of Germany by Federal Foreign Minister Hans-Dietrich Genscher and Finance Minister Theo Waigel. Today, leading European politicians are still convinced that the treaty was a decisive step on the road to a political union. For instance, the President of the European Parliament Martin Schulz says: “The Maastricht Treaty was a great stride towards European integration.”

The treaty set new key areas of cooperation, such as foreign and security policy as well as justice and home affairs policies. But the treaty also set up a special milestone for the introduction of the euro, which replaced the Deutschmark, franc and lira for cash transactions in 2002. In Maastricht the signatories reached a stability agreement for the single currency: the states with the euro should not overspend, they should deal cautiously with debt and conduct an orderly budget. The treaty envisaged the introduction of the euro for those states which fulfilled the so-called Maastricht criteria, i.e. a maximum national debt of 60 per cent of gross domestic product (GDP), a maximum new indebtedness of three per cent of GDP, and an inflation rate of no more than 1.5 percent above that of the most stable states.

At that time nobody seriously thought that the single currency would be put to a tough test 20 years later. The European heads of state and government have corrected a weakness in the Maastricht Treaty with the recently agreed European fiscal pact, which will be signed in March 2012. The pact is an important instrument for stabilizing the euro zone and strengthening the economic and monetary union. The participating states undertake to reduce their debts and implement a debt brake at national level.